Game devs speak out on Valve, Steam and conflict of interest

In the wake of some recent comments made by Gearbox CEO Randy Pitchford, Ars …

In a recent interview, Gearbox CEO Randy Pitchford—the developer behind the upcoming Borderlands—revealed some surprising opinions about Valve's Steam digital distribution platform. While the common sentiment among both gamers and developers tends to be positive, Pitchford told Maximum PC that "I don't trust Valve" and that he believes "a lot of the industry doesn't" as well.

Pitchford's main criticism is that with Valve being both a game developer and a platform holder, this situation creates "so much conflict of interest...that it's horrid." According to the Gearbox CEO, Valve's position allows them to exploit developers who use Steam to distribute their games. Given the surprising nature of these comments, Ars contacted several game developers to see just how widespread these opinions are.

"I agree with Pitchford about there being potential for conflict of interest and abuse of power, but I haven't seen even the faintest sign of this power being abused," Ron Carmel from World of Goo developer 2D Boy told Ars. "Quite the contrary, Valve offers the most developer-friendly terms for digital distribution in the industry. Do you know the saying 'there's nothing better than a good king and nothing worse than a bad one'? I think it applies here, and Steam has clearly been a good king so far."

Dylan Fitterer, whose rhythm game Audiosurf was released on Steam in February of last year, agrees, telling Ars, "If this is exploitation, more please." Audiosurf has achieved some great success on the platform, and still remains one of the top sellers in the indie games section of Steam. "In my experience, Valve has been an amazing business partner," Fitterer added.

"We put Steam as one of the A-list distribution channels, up there with XBLA and WiiWare," Telltale CTO Kevin Bruner told Ars over the phone. With a line-up consisting entirely of episodic gaming series, digital distribution is obviously something that is very important to Telltale. In addition to Steam, Telltale's games are available to purchase via the company's own online store, as well as other portals like Direct2Drive. But Bruner still has the utmost respect for Valve's service.

"Steam may be one the greatest things to happen recently," he told Ars. With its unique distribution model, Telltale has had issues with other digital portals in the past, but not once with Valve, which he describes as being "very accommodating."

As for the whole conflict of interest issue, none of the developers we spoke to were very worried.

"We've done third-party digital distribution in the past as well," Bruner explained, though it's not something Telltale has dabbled in recently. Still, according to Bruner, the concept of conflict of interest in a digital space is pretty much non-existent: without the financial and logistical barriers of retail, if you don't like what a particular online portal is doing, you can simply set up your own online store or move to another platform.

We were also unable to find any developers who would admit to feeling exploited by Valve. Quite the opposite actually. Jakub Dvorsky, from Machinarium developer Amanita Design, told Ars that Valve offers a comparable, and in many cases higher, revenue percentage when compared with other digital distribution outlets. And for a small independent developer, this makes all the difference.

"I think it's very good service," Dvorsky explained. "It works well and it encourages some people to favor digital copies to boxed versions, which is great for indie developers."

As for why Pitchford made these comments in spite of the seemingly overwhelmingly positive response we gathered from other developers, we're still unsure. Fitterer believes it may have something to do with drumming up some controversy with the impending release of Borderlands. Which, by the way, is receiving a very nice promotion on Steam right now.

I'm a big fan of Steam, so I probably shouldn't be chiming in with this but here goes:

If Valve is conducting a 'reign of terror' over developers, it's unlikely developers'd be willing to talk about the terror for fear of retribution (the amount of unlikelihood proportionate to the success of the title on Steam, or the share of it's sucess on the same). It's telling that the article doesn't include comments from any 'big name' developers, mostly indie shops. I don't have a handle on how big Gearbox is, but my sense is they are towards the middle of the market (a large independent shop) versus one of the Integrated Pubs&Devs (EAD, EA, SCE, MSS, Actilizzard, et al).

In addition, even if Valve isn't Apple-ing developers with draconian controls and treatment, there could still be significant incentive to lie about positives to be rewarded with better promotion/revenue sharing on Steam.

All that being said, I've loved Steam since it was bundled with CS (...or vice versa) and have not had any problems whatsoever. Newell consistently demonstrates himself to be not just savvy but also forward-thinking, which to me is the perfect combination for someone in his position. I wish there was a better competitor to Steam to drive innovation (e.g., Microsoft would get of its ass and put some effort into GfW...), but as it is Steam is a unique service with excellent quality (again, in my experience). Rock on, Steam.

I think Valve is too developer friendly. I'd really like the ability to give a game to a friend, which isn't possible on Steam.

I have many games I doubt I'll ever play again that I'm sure one of my cheap friends might like to play if it were free. If I had purchased a box set, I could hand it over but since it was a digital download I have no such option.

Steam is a great digital distribution service. I have been using them for years so I may be a bit biased but as far as I/consumerism goes, nothing else on the market can quite compare. Steam automatically locks down your games with their service but as far as DRM is concerned, it does it "just right". I have had to re-download games several times before and on several different machines without having any sort of problems wut-so-ever. Games are often times cheaper than what you would see at retail and you have the benefit of being able to play them on multiple machines (as long as you use the same account)and it has a very open platform for developers to use. It seems quite odd that Pitchford would criticize a service which they are using (and promoting) and can only be interperated as a publicity stunt. If they were truly upset with the way valve/steam handles things, they wouldn't use the service. End of discussion.

In addition, even if Valve isn't Apple-ing developers with draconian controls and treatment, there could still be significant incentive to lie about positives to be rewarded with better promotion/revenue sharing on Steam.

Nitpick, but an important distinction: Assuming you're referring to DRM, it's the studios themselves pushing those draconian controls, not Apple. They'd love to sell all DRM-free music, but the studios/RIAA won't allow it. There are some, though.

I'm just glad I don't have to worry about constantly patching CS or any other Valve title. Finding and installing the correct patch was a nuisance. Ok, I've got 1.40, now I need the 1.40 to 1.41 incremental patch so I can play. It was an annoyance that at least I don't have to deal with on Valve's games anymore.

This guy is going to look like a bit of a tit when 90% of his sales come from Steam. I just don't see Borderlands doing well in stores, despite how much I'm looking forward to it. It's another expensive shooter on the consoles, piracy will snag a portion of the PC players, and the rest of us will buy it wherever it tends to be cheapest...and that's usually Steam. I don't see anyone lamenting the lost joys of installing from cd/dvds either.

In addition, even if Valve isn't Apple-ing developers with draconian controls and treatment, there could still be significant incentive to lie about positives to be rewarded with better promotion/revenue sharing on Steam.

Nitpick, but an important distinction: Assuming you're referring to DRM, it's the studios themselves pushing those draconian controls, not Apple. They'd love to sell all DRM-free music, but the studios/RIAA won't allow it. There are some, though.

I dig Steam.

its easy to throw your DRM out the window 10 years after everyones locked into the iPod iTunes thing. Its like Microsoft saying 'hey guys you dont have to use internet explorer, you can get firefox'. Except in this case europe goes ape one one, and not the other.

Nice article Mr. Webster! I enjoyed reading an article that investigates new sources and combines them in an intelligent manner (as opposed to the regurgitate-the-news-heard-elswhere that the rest of internet reporting does). That is to say: thanks for the *journalism*!

Pitchford clarified on Slashdot that he just meant that he'd like to see more competition for them and wishes that they weren't the only good option. There's a lot of potential for abuse there... but Valve's shown no sign of actually abusing their position at the top.

For me, Steam provides enough utility to make up for the inconvenience of DRM, and a lot of other companies could (and should) learn from their example. Buying online from EA is a pain, and you're left entirely to yourself if something goes wrong. They even extort a bit of extra money from you for the ability to re-download the game more than a couple days later (and that's up-front... if you skip it, you get to re-buy the entire game if you haven't figured out how to back it up).

Originally posted by FrostX:its easy to throw your DRM out the window 10 years after everyones locked into the iPod iTunes thing. Its like Microsoft saying 'hey guys you dont have to use internet explorer, you can get firefox'. Except in this case europe goes ape one one, and not the other.

Not sure why Gearbox would be damning the company that helped put them on the map in the first place. No one forces devs to use Steam and if they don't like it there are a half dozen other options for them to use not to mention rolling their own solution. As long as Valve doesn't abuse the power they have by being both developer and hosting solution (and by most accounts they're not) I don't see there being much of an issue with it.

I love Steam and will continue to use it until Valve turns into the next EA or Activision.

Originally posted by Panick:Not sure why Gearbox would be damning the company that helped put them on the map in the first place. No one forces devs to use Steam and if they don't like it there are a half dozen other options for them to use not to mention rolling their own solution. As long as Valve doesn't abuse the power they have by being both developer and hosting solution (and by most accounts they're not) I don't see there being much of an issue with it.

I love Steam and will continue to use it until Valve turns into the next EA or Activision.

I dislike Steam, but as far as digital distribution goes, it is the best of the bunch.

That said, I don't get Pitchford's comments. How is Valve any more dangerous as a platform holder and developer than Nintendo, Microsoft, or Sony?

Originally posted by MatthiasF:I think Valve is too developer friendly. I'd really like the ability to give a game to a friend, which isn't possible on Steam.

Right now, you can certainly buy a copy of a game for a friend, but I don't think that's what you're thinking of.

Do you mean transferring ownership? That would open up the possibility of a second-hand Steam games market, which would not make the developers happy.

Now, loaning a game to a friend for a limited time (where you are denied access to it) - that could work. But then, some enterprising folks might turn it into a games rental service (and deny developers potential revenue).

He seems to think that video games are in competition with each other, where Valve's first person shooters are vying against Borderlands.He's wrong, of course. Games are judged primarily on an individual basis, how good they are, while peripheral issues like what platform or developer are second. So once Borderlands is released and the hype machine stops, we'll see if anyone even remembers it a year from now. It won't be Valve that kills a bad game.

Originally posted by thaqza:Okay let's be clear here, that quote is taken out of context--he simply meant that the average guy in the industry probably wouldn't:

And from Ars' investigation, that sentiment doesn't ring true. So why'd he say it?

"I like Valve personally, but I don't think others may feel the same" whilst technically possibly true, doesn't make any sense. Why say you like something but then throw in the "unsure" bit. Sounds like he wants to mask his own opinion by making it an unnamed "others'" opinion.

Not that this really adds anything to the conversation but, does everyone remember when Valve FIRST rolled out with Steam? I remember being right in the thick of my Counter-Strike days and I absolutely loathed Valve for their handling of Steam. The roll-out, and following months, were rocky, to put it nicely. Any yet, here I am, 7 (or so?) years removed and I reeeeally like Steam. 3 cheers for progress!

Rental? It seems Steam has the ability to give people the right to play Unreal Tournament 3 free for one weekend at least twice already. Lending it to a friend can't be that much more difficult, aside from exploitative business practices. However, if you introduce a sliding rule to determine "rate of lending" abuse against time, that can get complicated fast.

As for transferring ownership via sale, yes, I do find that problematic, but a deeper discount on the Steam weekend deals can to make it easier to swallow. Physical games tend to drop in value fast, and the dev gets a bigger cut of a somewhat higher price on a old game. That or separate accounts for each game...

Thanks Ars for getting the opinions of other devs on this matter, however I don't think you did a good sampling, as they are all independent games developers. For them, of-coarse Steam is great, its the reason they have become so popular and available to people. I would like to see you get more opinions from major games developers. I'm not saying independent developers don't matter, but major developers already have stuff too loose so they may be able to offer better insight on the impact of Steam on the game industry.

As for Pitchford's comments, I can understand why he has a healthy fear of Valve (another game developer) having a virtual monopoly on digital distribution. It's not hard to see how Valve could influence game sales by charging company X more than company Y. However, like everyone else, I haven't seen any real foul play by Valve yet, so I'll keep using Steam because its a great service. However, I would like to see competing services, such as Impulse, gain in popularity.

"I love Valve games, and I do business with the company," Pitchford added. "But, I’m just saying, Steam isn’t the answer. Steam helps us as customers, but it’s also a money grab, and Valve is exploiting a lot of people in a way that’s not totally fair. Valve is taking a larger share than it should for the service its providing. It’s exploiting a lot of small guys. For us big guys, we’re going to sell the units and it will be fine."

He seems to be saying that because Valve takes a larger share then it should that the smaller guys are at a disadvantage in some way. I wonder how true that is?

Your article gives the impression that you spoke to maybe 5 developers, although you do say that you were unable to find any developers who would admit to feeling exploited by Valve. Aside from that 5 in the article I assume that you spoke to more then that and these were the ones willing to give comment. I guess thats the number of developers you "reached" out to. But aren't there more that might give more differing opinions? The article almost looks like you specifically handpicked people to rebut Pitchford in a way.

So, for the article you may have spoken with the larger or more well established producers, but how about more of the the smaller ones?

What about a traditional publisher, like EA, that publishes internally and externally developed games? To the extent of my knowledge (which admittedly isn't much), the only significant difference business-wise is that a development house working with a traditional publisher will get up front payments.

As for Valve taking an unfair percentage of the profits, I suspect that the increase in visibility a game gets by going on Steam more than offsets any additional take that Valve has compared to other digital distributors. The fact of the matter is, there are a lot of services out there, and while Steam is certainly becoming the dominant one, I suspect that the quotes that Ars got indicate why: developers prefer Steam, which allows Valve to charge something of a premium. If it was too much, developers would leave Steam.

Originally posted by Defenestrator:Pitchford clarified on Slashdot that he just meant that he'd like to see more competition for them and wishes that they weren't the only good option. There's a lot of potential for abuse there... but Valve's shown no sign of actually abusing their position at the top.

For me, Steam provides enough utility to make up for the inconvenience of DRM, and a lot of other companies could (and should) learn from their example. Buying online from EA is a pain, and you're left entirely to yourself if something goes wrong. They even extort a bit of extra money from you for the ability to re-download the game more than a couple days later (and that's up-front... if you skip it, you get to re-buy the entire game if you haven't figured out how to back it up).

Well, if that was the case then shouldn't he be making an effort to get it on as many other platforms as possible? Doing a quick check, Borderlands doesn't seem to be on Impulse at all, for example.

Really, this just seems like a way to get attention right before the game comes out.

(Defnitely agree about the EA store. I'd never buy anything from that scam.)

Wow. I bet Valve feels kind of betrayed by Pitchford's comments. After all, they seem to go out of their way to avoid being "evil tyrants" and yet someone accuses them of it anyway. I'd be pissed, I know that much.

Assuming they are taking huge numbers from developers, the real question is, how much are they taking relative to what other publishers are taking? I've heard that Valve takes a small cut than, say, Microsoft or Sony for the XBLA and PSN respectively.

I love Steam to pieces, and see it as one of the best things to ever happen to gaming. I'm actually trying to get rid of all my hard copies, so that I can just focus on owning my games digitally. There are reasons for that:-no fumbling with CD keys (just install and play)-auto-updates-your digital ownership of games is eternal - you can install anywhere, on a moment's notice (the other day, the long-awaited Dark Mod (Thief universe) came out for Doom3, so what did I do? I booted up Steam, bought the Doom3 pack, and had it playable a couple minutes later. I didn't even move from my chair)-Steam downloading is incredibly fast nowadays (and I've never encountered a single hitch with anything)-great sales/deals on games practically every weekend (and often in-between)-Valve is not one of today's token corporate-swine publishers, and represents the best in gaming (they don't release unfinished garbage on PC, and neglect to patch things)

Originally posted by Dario D.:-Valve is not one of today's token corporate-swine publishers, and represents the best in gaming (they don't release unfinished garbage on PC, and neglect to patch things)

So what is purchased on physical media is unfinished and never patched? I was under the impression that a game from Valve was the same game that one would buy on CD/DVD and that the game patches came from the game producer/developer? Is that not true? Does Valve produce the patches for the developers games and do they somehow modify the game to get rid of any unfinished attributes?

Originally posted by Dario D.:I love Steam to pieces, and see it as one of the best things to ever happen to gaming. I'm actually trying to get rid of all my hard copies, so that I can just focus on owning my games digitally. There are reasons for that:-no fumbling with CD keys (just install and play)-auto-updates-your digital ownership of games is eternal - you can install anywhere, on a moment's notice (the other day, the long-awaited Dark Mod (Thief universe) came out for Doom3, so what did I do? I booted up Steam, bought the Doom3 pack, and had it playable a couple minutes later. I didn't even move from my chair)-Steam downloading is incredibly fast nowadays (and I've never encountered a single hitch with anything)-great sales/deals on games practically every weekend (and often in-between)-Valve is not one of today's token corporate-swine publishers, and represents the best in gaming (they don't release unfinished garbage on PC, and neglect to patch things)

Outside of the USA, Steam is an extremely expensive way to buy new releases (and even though they're good at keeping their finger on the pulse, their weekend sales are hit or miss). There's also no need for Steam to be involved in any of the other things you mention like auto-patching etc.; e.g. FEAR from 3 years ago had its own auto-updater built-in. Also, playing most titles from Steam "on a moment's notice" is crap; it's utterly dependent on your internet connection speed, and unless you're one of the few people with a >20mb connection, buying an entire game from Steam takes at least 45-60 minutes (if not massively longer) on a fairly standard 8mb connection.

Lastly, in regards to "releasing unfinished garbage", did you ever play Left4Dead ? While I can't say it was garbage, it was most definitely unfinished.

Yea that competition got noticed by steam, so they sent out a broadcast to vote for Gordon. Gordon's share of the vote shot up very quickly after that. It was a couple rounds before the final when that happened if I remember correctly.Our TF2 forum automatically posts Steam news, so we all saw it and voted

A daft thing to say really given that digital distribution is the clear way forward. I do not buy boxed copies of games anymore and all recent purchases (last 3 years) have been through Steam.

The Steam model really is the way forward for all digital media. The day the movie / TV industry truly embraces it worldwide will be a landmark occasion. Being able to have Steam deliver TV episodes and movies when they are released will be fantastic, imagine being able to preorder content and have it waiting for you when you get home, imagine then being able to log onto steam on any pc in the world and having access to all of your content...truly amazing!

Originally posted by ChrisG: Also, playing most titles from Steam "on a moment's notice" is crap; it's utterly dependent on your internet connection speed, and unless you're one of the few people with a >20mb connection, buying an entire game from Steam takes at least 45-60 minutes (if not massively longer) on a fairly standard 8mb connection.

Sounds about as fast as driving to a local store and picking up a copy. Even faster when I take into account the anemic PC game section at most stores and the fact that I might have to drive to 2 or 3 stores before I find what I want.